Financialisation, Economy, Society and Sustainable Development (FESSUD) is a five-year project under the European Commission 7th Framework Programme, which brings together economists and other social scientists to look at how financialisation - the increasing dominance of the financial system over other parts of the economy - has affected the performances of national economies and the global economy in the last 30 years. The following issues will be addressed:

the impact of financialisation on the achievement of specific economic, social, and environmental objectives;

the relationship between financialisation and the sustainability of the financial system, economic development and the environment;

the lessons to be drawn from the crisis about the nature and impact of financialisation;

the requisites for a financial system able to support a process of sustainable development, broadly conceived.

The role of the IPE/HWR Berlin in the FESSUD project

The work packages with IPE/HWR participation

WP2 - Comparative perspectives on financial systems in the EU Work package 2 aims to analyse the evolution and integration of the EU financial system as a whole (and within that the Economic and Monetary Union). Project participants have produced exhaustive reports on the financial systems of the respective countries. The report of the HWR on the German Financial System will be soon available online.

WP3 - Causes and consequences of the financial crisis The HWR is the coordinator of the work package 3, ‘Causes and consequences of the financial crisis’. This work package investigates the general causes of the global economic crisis which began in 2007 in the light of the long-run processes of financialisation. This includes:

a review of theories of financial crisis;

a review of the literature on previous crises;

a review of the literature on the effects of financialisation on distribution, growth and instability;

a review of the factors generating the recent crisis as provided in the literature;

the examination of the effects of financialisaton and the crisis on countries and specific sectors.

WP4 - Regulation of the financial sector The HWR is also participating in the work package 4, on developing new and more effective approaches to financial regulation. This should be applicable to specific national financial systems and address the possibility of international cooperation. The work of the HWR will cover the regulation and the supervision of the banking sector in Germany since the 1980s.

WP5 - Finance and well-being The objective of this work package is to evaluate from manifold perspectives the differential impact of financialisation and of the crisis on social well-being across the EU, focusing in particular on the relationships of households with the financial system. This will be done by undertaking household surveys on the connection between well-being and finance in Germany. Subsequently, the HWR will produce a policy report on financialisation and well-being in Germany.

WP9 - Financial stability and macroeconomic policies This work package aims to investigate theoretically and empirically the relations between financial stability and macroeconomic policies, where the policy alternatives addressing divergence and disparities between EMU member countries will be presented.

WP11 - Foresight The main objective here is to explore the possible evolutions of financialisation, the financial sector and relevant policies over a 15 to 20 year time horizon. The HWR will look at the relations and interactions between financialisation, rising inequality and rising (consumer) debt, outlining possible scenarios with the aim of addressing the sustainability issue of the recent trends.

WP12 – Synthesis and conclusions Finally, a synthesis will be produced to consolidate the understanding of the causes, consequences and costs of the financial crisis relevant for the development of policies (financial, regulatory, and structural) towards the financial sector.